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Mad Money

News/Business. (2013)

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Boston 16, Baxter 12, Us 8, Abbott 4, Ted 4, America 4, Jim Cramer 3, Cramer 3, Jim 3, Maxwell 3, Lowe 3, Bayer Back & Body 3, Washington 3, Nordstrom 2, Tjx 2, Sears 2, Potash 2, Geico 2, Phillips 2, Vidal Sassoon 2,
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  NBC    Mad Money    News/Business.  (2013)  

    May 18, 2013
    3:00 - 4:00am EDT  

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far this earnings period have been positive earnings surprises and as much as the recent improvement in hiring and those have been behind this extraordinary run. that's true. it's happened. will it continue though? let's see what awaits us in the game plan for next week. kicking things off, we hear from campbell's soup, the symbol is cbp. the consumer segment has gotten so overvalued at least versus its historical average that we'll have to pay attention to cpb. it comes from the higher than average dividends, and also part of it comes from much better than expected earnings from almost every player in the industry. if campbell's keeps its trend up, it could spur the next move, but remember, mondays around here have been very weak. i'm not betting for a strong report or a stronger action.
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today we saw the ipo of tab low, t-a-b-l-e-a-u, and the symbol is data on the new york stock exchange. this helps employees to find trends from the databases. the stock came public at $31 and it opened at 47. this deal reminds us that it's getting up and we want our fair share. i need you to put in on monday with your broker for key deals that are stated for next week, and i should have done it for tableau, this may not be the case with these two deals. first is channel adviser. this san emerse software company. every retailer i talked to wants
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to have omni channels. second is an old favorite of mine from when it used to be public. and this is a real head's up. sprout's farmer's market makes 150 natural organic deals. i did not expect fairway to go to a premium. that was at the last minute. so i got to get you heads up on sprout. it got hotter in this segment when whole foods reported a terrific number, that has not looked back at all. sprout may not become public really short-term. maybe in a couple weeks, three weeks. but i think it's important to the highlight now. because i want you to keep this in front of you so you can get some of this. i think that will abe very hot deal. tuesday, like so many days next week, we got a huge number of retailers reporting. i'm a little nervous here. because first up is best buy, bby.
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this stock has been ripping ever since it last reported. business appears to be stabilized. the specter of beating amazon to death seems to vanish. that said, i don't want to go into that quarter, being, owning that stock. because walmart in its conference call, if you listened to that yesterday, they specifically called out home entertainment as a weaker portion of the store when they reported their own disappointing quarter. it's been done on the backs of the short sellers. i think most of the short sellers are done and have been cleaned out which means there may not be a trampoline underneath to bounce from anymore. without the trampoline, you get the picture. auto zone, oh, boy, this is an interesting company. autozone, go into the zone. puts up numbers tuesday. i have been following the stock for years ever since they took the position bsl partners. this is one that's really good to play after reports. so often, azo gets hammered on the quarter.
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but then we hear about how things are actually better than expected and the replacement auto parts business and we see how much stock they bought. it's an incredible buyback. it's still shrinking the flow dramatically. then the buyers rush in. wait until you see the whites of their eyes and then some. then pull the trigger. now, there is home depot. now this is a stock which sadly my charitable trust sold out just today. we have become so greedy. we felt the expectation has become so elevated. bulls make money, bears make money. after what we saw with walmart, we didn't want to risk it. keep that in mind as you approach a stock that has run 24% this year and was up big last year even though frank blake, the ceo, is terrific and i'm going get my tomato flats there. the trust also rang the register on some, not all, tjx, which reports before the opening tuesday. here we felt the disappointing results in jw nordstroms could pretend weakness in tjx. although jwn at the end of the day got dinged.
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that's remarkable, too. it was a big disappointment last night. still the retailers have run too much from my taste at the moment. at a certain point, you get a nose bleed. after the bell we hear from a very interesting company because of a situation developing called net app. everyone called it end app. the symbol is netapp. it's currently the subject of hedge fund activism. this time it's from elliott management, remember them from hess? they just got people on the board. they want a new end team as well as that $5 billion in coiffeurs returned to shareholders. so what's nettap response going to be? let's take a listen as i know my partner david faber will. we are both fascinated by this one. wednesday, more retailers. yeah. more worries, target and lowe's let us know how they're doing. perhaps target has been able to stand taller than walmart, and perhaps kohl's, and therefore
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the stock ran, but i don't want to bet on it unless it comes ahead from the quarter and many the retailer from thursday can come down and that's the same with lowe's if home depot comes down. if home depot has a single fly on it, i think some people will say lowe's is infested. we have two other bellwethers, two that i would like to see what happened because i don't know. hewlett-packard and toll brothers -- excuse me. hewlett-packard rallied 50%. 50% mostly because it was down 44% last year and also because many people are thinking that ceo meg whitman can turn the once proud company around. look, i hope that's the case. there are hundreds of thousands of people that work there. i wish them well, but dell's numbers last night that confirms the computer business is in the midst of a huge downturn, if not a total tailspin. toll brothers? here's irony. last time it reported the stock was roughly right where it went out today at $36.92.
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after that report which, by the way, i came on and i didn't think it was that bad, but the stock got a hit. after the report last time the stock got dropped for a 20% decline. i thought the hit was unfair. i urge you to buy it when it got lower, but the bruising is still on my mind and if toll was riding high i don't want to own and and that's despite the fact that it's a tremendous home builder and i'm a huge bull on housing and it doesn't matter what toll does it isn't enough to please the jackals out there. thursday, we have a couple of discounters. yes, i'm portraying myself as worried because this is the cohort as this that has run so much. we have dollar tree which happens to be my favorite place to get candy with pop down in south philadelphia. that store has many characteristics of walmart and that, therefore, is worrisome. ross stores which had been one of my favorites has been funk of late, the stock. that also is concerning, but finally, get this, sears. here's been with very lowly expectations and it does have a
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huge correlation with housing. low expectations and a housing, bring it in. that's for me. after the bell thursday we hear from sales force.com and this is the best of the best and the high-growth clown plays. think about the tableau that came public. this is tableau times ten. i think it will be a lights out quarter. the sales force last quarter drove the stock up immediately and i welcomed it because the stock was liquid. i think this is worth owning going into the quarter. i actually said you can buy sales force and buy sears ahead of the quarter and we get a glimpse of how williams-sonoma is doing and last year interviewed the ceo. it was a remarkable quarter. it was remarkable and she was in a talk on "squawk on the street." this was the highest on the high end in all things housing related and it's been winning. this stock seems to be in the true sweet spot, i think. i think the business is strong, but what's crucial here is the stock is down. if you want to take a shot ahead
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of the quarter because i'm worried that that one has moved too much, too. finally on friday we hear from retailers totally ungamable and another one that's run too much for me to be comfortable. abercrombie & fitch and footlocker. when we last heard from amf, we thought it was all bad. the expectations have since been ratcheted up, perhaps too far for us to make any sense to go anf. and judging from how well nike is doing, the stock is pennies from the 52-week high and so far it hasn't been a great place for going into the earnings report. you can tell i've been colored by the nordstrom's bottom line. >> it's been done in an environment where expectations were lower going into the quarters and that's no longer the case. given the plethora of retail reports coming from walmart and nordstrom, i want to be careful of the stocks until expectations
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are reduced and the stocks reflect a little more weakness than they currently do. let's go to larry in massachusetts, larry? >> jim, how's the maestro of the market tonight? >> very good. how are you? >> i'm terrific. i want you to know on my daughter's wall there's a pennant from the first interleague game from the phillies and the red sox, june 15, 1997. don't ask who won, but it took ten innings. >> my friend in the rhode island gaming business was in one of those games. >> i have no doubt. >> thanks for your passion and keep coming out and making the homework clear. shout out to katie in honor of louise who convinced you to be your best you. >> that's true. thank you very much. >> you're well in. >> you often say don't buy an ipo in the after market. some of us aren't heavy hitters who can call up our broker to take down a slug of pinnacle. with facebook which opened at 38 and closed at 38.01 you turned out to be right. >> thank you.
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>> however william lyons closed midway between its subscription price and its open yesterday. big difference in the industry aside. how were we to know yesterday whether this was a buy? >> think it's funny you should say this. when the market turned up it gave up the gain that i expected to have it. i think if you can buy the stock at 36. i thank you for your kind comments. john in california. john? >> hi. boo-yah, jim cramer, and this is john from huntington beach. amd, it's moved down dramatically and went back up. this tuesday microsoft will release with a new xbox. >> yeah, and you're right. that new xbox. goldman took it to a sell because it felt it ran too much and the stock bounced back. you know what? i bet it won't make that much money when the xbox comes out. i still think it will trade at 35. expectations are high and that often causes disappointments. be careful with the stocks until expectations or share prices come back down. it's going to be a little tougher week. retail is the group that has run too much going into the
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quarters. "mad money" will be right back. coming up, soaring spec. from stents to pacemakers, this scientific spec makes medical devices that save lives. after soaring over 50% this year alone, cramer's giving it a check-up to see if it can continue the run. and later, time to part ways? two parts of one major biotech play both make billions, but are they better off alone? tonight, don't miss the potential split that could spark the right chemistry for your portfolio. all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets.
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send jim an email to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. [ dylan ] this is one way to keep your underwear clean. this is another! ta-daa! try charmin ultra strong. it cleans so well and you can use up to four times less than the leading value brand. oh! there it is. thanks son. hey! [ female announcer ] charmin ultra strong has a duraclean texture that can help you get clean while still using less. and it's four times stronger versus the leading value brand. charmin ultra strong helps keep you and your underwear clean. we all go. why not enjoy the go with charmin ultra strong? are proven to be effective pain relievers tylenol works by blocking pain signals to your brain bayer back & body's dual action formula
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how do you shop for bargains when the market keeps roaring relentlessly higher like today? this is the moment when it pays to start looking at long-term losers! yeah, losers, ones that have been dogs for ages to see if any of them have what it takes to turn that around. the down and out speculative turnaround story for you on speculation friday. i'm talking about the once great medical devicemaker -- ♪ >> boston scientific? bsx? a stock that has been on a long, painful slide lower. >> the house of pain! >> for the last eight years. only now i think boston scientific has bottomed and may be able to break out to the upside. boston scientific has had a history of making drug catheters that can go through veins and arteries and pacemakers and
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implantable defibrilators and drug-eluding stents. a stent gets delivered through a small hold in your leg without major surgery and they cut down the need for bypass surgery which can be risky and expensive. boston scientific was the king of stents. we used to call it the king of stents and this business gave them fabulous growth and then the stent market became saturated and only so many people need their arteries unclogged in a given year and since then it's declined dramatically in the cardiac stent, and think pace makers and defibrilators and these two areas have been bleeding for ages now. the company bought guidant for $26 billion in order to rejuvenate itself by growing its defibrillator business. instead, guidant bought tens of thousands of product recalls followed by lawsuits. boston scientific would have been better passing on guidant and saving its money. the entire company now has an enterprise value of just $15 billion.
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beyond the guidant fiasco, boston scientific has faced everything from patent lawsuits -- to serious competition in a weak with, global economy, to fda warning letters for quality control issues. to give you some idea how far this stock has fallen in 2005 boston scientific peaked at an astounding $45 a share, but for more than three years now the darn thing has been flat lining below ten smackers. boston scientific has rallied an amazing 69% in the beginning of the year and at $9 and change it's poised to break near the $10 barrier and the reason is it's been turning itself around. boston scientific margins are on the rise and the balance sheet looks good and they finally have a pipeline with some exciting prospects and not producing revenues now, but certainly in the future. first of all, the company has moved into a bunch of new areas that's expected to grow incredibly fast. they bought a company called
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asthmatics. and they treated severe asthma. they're selling subcutaneous implantable defibrillators that go right in under the skin rather than having to be placed next to the heart. the aortic valve replacements renew heart valve is delivered via catheter and they're working on an a closure device. they have a minimally invasive device that helps relief hypertension with renal denervation. kind of like a pacemaker for the brain that helps with a number of neurological problems and all of these new areas together are expected to post a 57% compound annual growth rate from 2014 through 2017. don't get too excited yet because all these innovative products account for 1% of boston scientific sales, but remember, they are all new. some aren't even out yet, but by 2017 they'll be up to 13% of the company's sales and i think
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they'll be very profitable. the thing you need to understand about the medical device companies is they thrive on new products. new products give the sales people something to sell. they capture the attention of doctors and they allow companies to gain market share on the competition. these products won't start moving the needle until next year and boston scientific is speculating. at this level it's worth a shot. consider the subcutaneous implantable defibrillator, a huge product on the market. unlike a typical defibrillator, this one doesn't require electrodes to be run through the blood vessels and placed right on the heart making it more safe and reliable. as you know, that kind of surgery is the kind of surgery that is life-threatening if it goes wrong. boston scientific got approval for this device last fall. doing so well they literally don't have enough supply to meet the demand. when it's fully launched this thing could be a $750 million product.
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that's equal to a tenth of the current revenues and it is just one of the many new products that's out there. i just mention it because to me it's emblematic of what bsx is doing. boston scientific's management had a question and answer session at the heart society meeting. the management biz which makes up 28% of its sales is poised to improve. they highlighted the new products just mentioned and after years of revenue declines boston scientific is on track, no one seems to be talking about this, is on track to flat to positive sales growth in the second half of the year. ♪ hallelujah >> as the company's revenue growth accelerates there's serious potential for its operating margins to expand from 19% at the end of last year up to 25%. about a third of that should come from cost-cuts. and the rest is suspected to be caused by higher growth margins when boston scientific makes
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after the cost of the sales. the stent business has actually begun to stabilize. the rising demand from emerging market country, not the u.s., brazil, russia, india, china and the usual brick suspects and the overall business is still declining, but at a much lower rate than the hideous declines we've seen over the last few years. we're being looking at a gradual -- boston scientific is going from a company with with declining revenues to one that is going to have consistent mid-single digit revenue growth and if management can execute their plans even faster earnings growth and a number of analysts have upgraded the stock and i'm not as early as i would like here. boston is getting used to boston scientific again and push the stock higher. >> right now bsx sells for a paltry 12.5 times next year's earnings and they regard the company as a pathetic also ran. the legacy of years of disappointment when i first started hearing about it i said would you give me a break?
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>> well, i had to crack the books on it and it's pretty darn good. best of breed medical devices sells for 15 times earnings and you can keep executing on the turnaround. that's a 26% gain. 26% higher than where it is right now and that could be the beginning, as the revenues for many of those new products i mentioned start to kick in. here's the bottom line, there's no doubt about it. it's rallied from 5:00 to 9, while releasing a host new medical devices that could be big sellers, this one is for speculation only as it remains unproven and disliked, but the risk reward is too great to ignore, hence why it's worth a bet at least to 11 and change where the stock could go to simply if it gets some love from the street instead of the contempt it's experienced for as long as most of us can remember.
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after the break we'll try to make you more money. coming up, time to part ways? two bots of one major biotech play make billions, but are they better off alone? >> tonight, don't miss the potential split that could spark the right chemistry for your portfolio. hoo-hoo. hoo-hoo...hoo-hoo. hoo-hoo hoo. sir... i'll get it together i promise... heeheehee. jimmy: ronny, how happy are folks who save hundreds of dollars switching to geico? ronny:i'd say happier than the pillsbury doughboy on his way to a baking convention. get happy. get geico. fifteen minutes could save you fifteen percent or more. diarrhea, gas, bloating? yes! one phillips' colon health probiotic cap each day
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>> what's the best breakup song? i had a lot of good contenders, maybe a class like marvin gaye's heard it through the grapevine. bill withers singing ain't no sunshine when she's gone and maybe something more contemporary that i find popping up in the first 500 songs of my itunes, "wide awake," katy perry who i saw, but was too afraid to go up and ask for my picture. for my money and that's what this show is about is money, the best breakup song are all written by health care companies that have gotten too big for their own good. you don't see them at the top of itunes. don't think they're not happening. i'm constantly promoting the idea that companies can unlock value with the stroke of a pen so that each component can become easier for wall street to understand because wall street can be really stupid. to put a value on it they need
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to have it broken up and by far the best of the break-up plays have been in health care which is why tonight i've got a new name for you with a ton of breakup potential. first, we have to go over the formula. abbot lab, the big medical device maker told us if it split off its pharmaceutical division as a separate company, abv and we recommended the stock a few weeks later because we thought each if the name is silly we can make a lot of money. abbott labs together have given you a 60% gain. if you count when the actual spin-off happened, in the shares of the spin-off. i have one that i liked they know people said, jim, it doesn't keep me wide awake, and i recommended qvidium after management said it would spin off the pharma business.
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it is up 52%. each whispers that a break up might happen would make you money in this space. the brilliant alex gorsky took the helm at johnson & johnson. there's been constant speculation including from yours truly that alex gorsky might unlock value by smith up the company in four ways with the 13 months since gorsky became ceo. the brothers johnson have dramatically outperformed the drg, and that's the farm index and that's up 24% over the same period and that's just whispers. gorsky is not thinking at all that he might do that. he's health care breakups are a tried and true formula. so who else can follow this playbook? how about -- ♪ >> bax, that's right, baxter international. for you real old timers. the red-headed stepchild of the
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health care sector. the underlying business simply does not belong under one roof. on the one hand, baxter makes medical devices to intravenous delivery systems, infusion pumps and aesthetics and kidney dialysis systems, take a look and heaven forbid you have to have one of these. it's always baxter. you see it right on the level it's always baxter. it develops and sells treatments on plasma-based proteins and this is high value added for hemophil and other bleeding disorders and burn and shock and all making value-added proprietary stocks. when you take a company like this and you break it up into a medical products business and a drug business, the value is created instantly. i see no reason why baxter should be any different at all. it looks just like those two.
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the way it is now the stock's getting lost in the shuffle even though the health care stocks have been up this year. it's up 9% since the beginning of 2013. join the party, partner, dramatically lagging its co-h orts when baxter was, working on the alzheimers drug, but the truth is if you're dropping three bucks intraday, 24 hours later the stock was trading before the stock was no good. it was at 2.7% at these levels tells me the stock is a few points below where it's currently trading. so this is not a speculative situation. now, the real reason why baxter has been lagging its cohort at least in terms of my view of "mad money," it's simply that it doesn't make sense the way it's currently configured. it's like abbott labs before the breakup and abbott was always misunderstood. wall street is full of analysts who are highly specialized and
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typically these people will only follow one industry and they're an orthopedic doctor and a cardiac surgeon. they don't follow the same things and you have analysts that understand the pharmaceutical business and they can wrap their heads around the medical device space, but they are separate. the way professional lenders work, doesn't lend itself, to medical device and drug company under one roof. the same goes for how money managers pick stocks. buy a drug company and buy a medical device play. to the wall street fashion show, baxter is neither fish nor foul. it's an unappetizing mix of fish and chicken that nobody wants to eat. you bake this company, you break it up and you split it into a medical products business and a pure play drug biz, andy think both of finally get the respect and valuations they deserve. honestly, the baxter situation is so very reminiscent of abbott labs and remember, ever since it happened in the beginning of the
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year abbott was up 12% and it was up fabulous, 33%. that's almost regeneron for heaven's stake. two pure plays are much easier to value than to own for one jumbled stock that's too big for his own good. at last july the company restructured itself into two segment, making it much easier to organize and implement a potential breakup. >> morgan stanley put out a great piece of research. it bothered me because i wanted to do this two weeks ago. they got it out ahead of me, but you know what? i'm like a tv talk show host. we know analyst -- and that's good, that's going to be on twitter because he's just a talk show host. it doesn't matter, it's still all right. another reputable source besides "mad money" had thero this, too. the mad money team had it and
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the morgan stanley team, which i will match our team up against their team. anyway, how much would baxter be work on the breakup? >> the side of the business is expected to earn $2.94 last year. the higher traded between 21 times earnings and to celgene's much higher than that. that gives you a $55 stock. the medical products division. say that trades at 31, and why don't we add all of these together in. you get 87 1/2 dollars and that's 19.5 from where it is now and that's the value of baxter you can create with the stroke of a pen. that's right, it would be up that much.
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if monday morning and we came in and announced this breakup, i don't think you would get 14% by letting each business and focus what she does best. it did 6.5 -- many like we like to do. these are like hockey plays until hockey season's over. many shots on goal including a hemophilia, and an orphan drug. we love the offer an drugs on this show and it's currently waiting for ana, proval division from the fda. baxter's acquired a company called gambrill that will give them more exposure to kidney dialysis machines and it should provide a boost when the deal kicks in. this is the bottom line of one of the best ideas on "mad money." breaking up the unwielding companies that has been a sure-fire way to create value and it's taken a page from the playbook and sent the stock soaring higher with the stroke of a pen. simply by spinning off one of its divisions. in the meantime, you're getting paid to wait for the stock that
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might do fine until they figure out how badly baxter needs to be more than one company. rob in washington, rob? >> hi, jim. boo-yah from washington, d.c. i'm a recent grad and i just started my portfolio. you speak a lot about offer an drug companies and i'm curious about quest core pharmaceuticals. >> that's a sore point with us because we liked it and then there was a big bear raid and it got cut in half and it bounced all of the way back. i don't want you near this stock. it's got that one gel product. i just think you've got to have many shots on goal. that has one. i do not want you to -- >> don't buy! >> quest core pharma. sometimes breaking up makes you better and makes you stronger and the best remedy for baxter as we've seen it in the other health care plays, just split yourself in two and you get 19% monday morning. don't move. "lightning round" is next.
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>> it is time -- it is time for the lightning round on cramer's mad money -- on. play until we hear this sound and then the lightning round is over. are you ready, skee-daddy? i want to start with nick in arizona. nick? >> how are you doing, man? >> couldn't be better.
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how about you? >> ubiquiti networks. >> you have to wait for the secondary and it's a big stock. let's go to richard in illinois. richard? >> mr. cramer, i want to thank you for all your help and guidance and today i want to know about cornerstone on demand. csnd. >> i recommended that stock after doing research on it when it was at 20 and now it's doubled. believe it or not, if you did buy it at the time and i recommend it, you should ring the register on some and this does social networking and networking software and people like that. software on demand and people like that. this is a good stock. i need to go to john in washington. john? >> boo-yah, mr. kramer? >> boo-yah? >> thank you for keeping my head screwed on most of the time. i sometimes want it to get unscrewed.
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>> no, keep it on. it's better that way. what's up? >> my stock is heckman now that they're changing their name. >> we just got the baker hues recount today and for the first time it is when i can remember the recount is higher which means --? buy, buy, buy, it will make a comeback. i do not want to sell hessman. i know people are sick of it. >> let's go to bruce in arizona. >> they raised their dividends. >> what was the stock? i'm sorry. >> potash. >> potash is okay. i mean, you know, it's an inexpensive stock. that's not enough anymore. you really have to have something going. that just doesn't cut it for me, and that, ladies and gentlemen, is the conclusion of the lightning round! >> the lightning round is sponsored by td ameritrade.
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>> it's underperformed its peers and kla 10corp by 20% and falling behind the semiconductor index also known as the socks. >> led-based lights have become increasingly popular. they actually look like an old-fashioned light bulb. not a prop from a low-budget science fiction movie. >> i feel like i'm the sham wow guy here. >> oh, yeah!
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you know what's been building up? the tweets. it's time to answer some of the tweets and you've been sending them @jim cramer mad tweets and i get up at 3:55 and go through
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most of them. i delete you, i'm sorry. let's go to the first tweet @gamekeeper. here's the thing about radiant. i was being asked about this on twitter just yesterday and the day before because it is the speculative stock of the year and to get caught up in the notion that i'll give you a price target like 16 and it goes to 15. radiant is very undervalued and what's happening is the bad mortgages are rolling off. remember, they're a mortgage insurer and the fha which is the principal competitor. next year, i expect the fha to drop out of underwriting entirely and they're there with 2014. i want to stick with the facts. i like radiant, and by the way, i also like gen worth, and it
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doesn't have as much leverage insurance and next let's go to tyler ashworth @tylerash worth. who with says since stocks such as k.o., coca-cola and wc, wells fargo have hit highs, should i reinvest dividends until prices are lower to reinvest and when i answered there was a tweet today and i answered was there a situation where i should not reinvent dividends? i said yes. they're a nuclear war. you want to always reinvest your dividends and i like wells fargo and my charitable trust has been working. it's a very inexpensive stock. coca-cola, frankly, not a lot of upside "mad money" is back after the break. both tylenol and bayer back & body are proven to be effective pain relievers tylenol works by blocking pain signals to your brain
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one year ago facebook came public. to me it was an incredible opportunity to get the public interested in the stock market again. the market has been my passion, my life's work. i like to protect it. keep it as pristine as possible for individuals of all ages, all levels of wealth. sometimes i consider myself the equivalent of a park ranger, like a shepherd at national park for now and all generations that's why i consider the facebook ipo the equivalent of a man made forest fire, an abomination of a deal which has spoiled the park that i wanted so much to preserve. for those who are missing out on this amazing mechanism, the market that raises money for companies and helps tens of millions of americans save for retirement is just plain old fun. by now we all know what happened. the public's demand for the stock overwhelmed the amount that was available for sale until the last minute when the segment of the market, precluded hedge funds and mutual funds learned that business had slowed. facebook had been caught flat
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footed by the amazing migration with incredible speed from desktops to mobile devices. the smartest guys in the room didn't see the widespread mobile adoption coming so they were no longer able to meet the projections that so many thought they could. at the same time facebook realized it wouldn't be able to deliver on its promises. the underwriters were uncertain about what to do themselves. the sophisticated investors with the slowdown and the transfer from desktop to mobile were backing away, just when the unsophisticated users of facebook were stepping up to buy stock and that created a distinctly 1999 to 2000 dot-com outcome where the institutions were eager to flip and the retail investors chose to use market orders and had to settle on an artificially high price and it collapsed immediately. as if it wasn't enough, the machines broke down, too. overwhelmed by what had to be
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the most telegraphed situation imaginable and they should have been able to keep a steady hand on the pillar and instead the hand broke. we could say these are all innocent mistake but the combination of a greedy company with many shareholders who of theed out, mutual funds and hedge funds who had a chashs to back out the last minute and caused a true spoiling of the stock market landscape and given that there had been so many insider trading pros dugzs and so many stories about the flash crash and so many questions about the shady nature of high frequency trading and facebook amounted to just a big nail in the coffin for pretty much everyone who jumped into the stock market on that faded day. now since then, i believe face book has come on strong with mobile offerings and the adoptions of the site remain robust, but it has become a very hated company with a very hated stock, and at least on wall street, and in part because of
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what happens the day it came public because they're never regained the confidence of the institutional investors for the users of the desktop and the mobile phone. i think it's an unfair judgment and my charitable trust has been a buyer of facebook and with the long-term speculation and it has been unrewarding and i believe the company execs are smart and i think they'll figure out how to monetize and they're popular institution of 1.2 billion user, but the market, facebook made many people avoid stocks since the dotcom bomb realized nothing's changed at all. they were simply there once again for the fleecing. the lack of respect for mom and pop investors discussed. for these people the initial public offering of facebook was truly a revolting development. one that left them thinking, you see? it is indeed all rigged and while you know i don't agree with that, i can't blame anyone for reaching that sad, sad conclusion. stick with cramer.
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>> look. it's been an amazing week and all anybody can talk about is froth. tesla, all right? beale put that in the froth category and i'm not each putting netflix in the froth category because i think microsoft or yahoo or facebook or even apple should buy them. that's all of the froth we've got, i say you stick with it. do not be cashing out yet. you do have some time. we can go higher. i'd like to say there's all a bull market somewhere and i promise to try to find it just for you on "mad money." i'm jim cramer and i'll see you monday. we're visiting the most unique supper clubs across the country.
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we're giving you an inside look at the country's best supper clubs. like here in new york, part of the new meat ball club in chelsea. i got a chance to experience some of the amazing over the top supper clubs. let's jump into my first in san francisco, which was quite the competition. check it out. >> you're probably wondering what's going on. people dressed up as monkeys in space suits. fear not, you've just entered the urban eating league. five houses compete to see who can host the best themed dinner party. think of it as one part costume party, one part dinner party with a dash of crazy mixed in. >> the urban eating league. >> we're going to be going around the neighborhood, five houses cooking a meal and we're going to judge who did the best job.